Telangana’s Capital expenditure declines under Congress regime

Telangana’s capital expenditure for the fiscal year 2024-25 has declined under the Congress government compared to the previous year under the BRS regime. Although there was a significant surge in spending in October, the overall progress remains behind last year's figures.

As of October 2024, Telangana recorded a capital expenditure of Rs 17,283.69 crore, considerably lower than the Rs 25,790.33 crore spent by the same period in 2023-24.

October Boost Amid Slow Start

October alone contributed Rs 7,759.59 crore – almost half of the year's total so far. However, spending in earlier months, particularly August and September, was notably slower. In August 2024, the expenditure was just Rs 556.31 crore, a stark contrast to the Rs 5,069.59 crore spent in August 2023.

The slow start, with April-July 2024 spending at Rs 7,358.52 crore compared to Rs 13,073.95 crore in the same period last year, indicates cautious fiscal management and potential delays in project approvals due to the elections. This sluggish beginning impacted development projects in crucial sectors such as irrigation, roads, and urban infrastructure.

Government Push to Revive Momentum

The sharp increase in October suggests a concerted effort by the government to revive momentum. This spike reflects initiatives to fast-track delayed projects and maintain public confidence in infrastructure development.

Finance department officials indicated that capital expenditure would increase in the next quarter to meet the annual target of Rs 32,745.8 crore by the end of the fiscal year.

“The lag in capital expenditure is largely due to the Lok Sabha elections and uncertainty over Central funds for the current fiscal until the full-fledged union budget was presented in June. We aim to catch up with our annual target over the next four months,” a top official stated.

Revenue and Borrowings Concerns

Despite these efforts, there are concerns about state revenue and market borrowings lagging behind targets. Revenue receipts were around Rs 1.02 lakh crore by the end of November, against an annual target of Rs 2.21 lakh crore. Meanwhile, market borrowings had already surpassed Rs 41,000 crore by December 20, against a budget estimate of Rs 49,255 crore for the current fiscal year.

Analysts' Recommendations

Analysts suggest that addressing delays in fund disbursement and prioritizing high-impact sectors like transportation, irrigation, and urban development can help bridge the gap and ensure the State’s developmental trajectory remains on track. They emphasize the need to balance fiscal discipline with development needs to avoid delaying essential projects and missing opportunities for job creation and economic growth.